From waste to watts
16/03/2026 (Borneo Bulletin) - Across Southeast Asia, mountains of agricultural waste are quietly piling up every harvest season. Rice husks, palm oil residues, coconut shells and sugarcane bagasse often end up burned, discarded or left to decompose.
Yet hidden inside this organic debris lies an energy resource that could help power the region’s transition away from fossil fuels.
A recent research report by the Economic Research Institute for ASEAN and East Asia(ERIA) explores how countries in the region could develop stronger bioenergy supply chains, turning agricultural by-products into valuable fuel while supporting climate goals and energy security.
The study, titled Development of the Bioenergy Supply Chain in AZEC Partner Countries –Phase II, examines the opportunities and challenges facing bioenergy development in Indonesia, Malaysia and the Philippines, three countries with abundant biomass resources.
TURNING BIOMASS INTO ENERGY
Bioenergy refers to energy produced from biological materials, commonly known as biomass. These include crop residues, forestry waste, used cooking oil and other organic materials that can be converted into fuels.
Such fuels can take several forms. Biodiesel is commonly produced from vegetable oils such as palm oil.
Bioethanol is typically derived from sugar- or starch-based crops such as sugarcane or corn. Biogas is produced through the decomposition of organic waste, while newer fuels such as sustainable aviation fuel can be created from used cooking oil or agricultural residues.
Unlike wind or solar energy, bioenergy has a particular advantage. It can be stored and used when needed, making it a reliable energy source that can help stabilise electricity grids and support industries that require constant power. As global companies push to reduce carbon emissions across their supply chains, demand for renewable and low-carbon fuels is rising, particularly in Southeast Asia where manufacturing continues to expand. Yet while the region holds immense biomass potential, turning that potential into a fully functioning bioenergy sector remains a complex challenge.
ASEAN’S BIOENERGY HEAVYWEIGHT
Among the countries examined in the report, Indonesia stands out as the region’s largest bioenergy producer, largely thanks to its massive palm oil industry.
Palm oil has become the backbone of Indonesia’s biodiesel sector. Over the past decade, the government has implemented aggressive blending mandates, requiring diesel fuel to contain increasing proportions of biodiesel. The country reached a 35 per cent biodiesel blend in 2023, and is exploring plans to increase the blend further.
Government support has played a major role in this growth. A levy on palm oil exports is used to subsidise biodiesel production, helping to bridge the cost gap between biofuels and conventional diesel.
However, the report notes that other forms of bioenergy in Indonesia remain under developed. Bioethanol production is limited due to shortages of sugar-based feed stock, while sustainable aviation fuel is still in the early stages of development.
Infrastructure and cost barriers continue to slow the expansion of newer biofuels, even in a country with abundant agricultural resources.
POLICY SUPPORT BUT SLOW UPTAKE
Malaysia has also made significant policy efforts to promote renewable energy, including bioenergy derived from oil palm biomass.
Over the past two decades, the government has introduced several initiatives, including the National Biofuel Policy, the Renewable Energy Act, and feed-in tariff programmes designed to encourage investment in renewable energy projects.
Palm oil residues such as empty fruit bunches and palm kernel shells represent a major biomass resource in Malaysia, and the country has also developed an export market for biomass pellets.
Despite these efforts, bioenergy still accounts for only a small share of Malaysia’s overall energy mix.
The report highlights several reasons, including logistical challenges in collecting biomass, competition with other uses for agricultural residues and the relatively high cost of bioenergy technologies. Even so, Malaysia’s strong policy framework and growing emphasis on sustainability suggest that bioenergy could play a larger role in the country’s long-term energy transition.
AGRICULTURAL POTENTIAL WAITING TO BE TAPPED
The Philippines presents a different kind of opportunity. With extensive agriculture across its islands, the country produces large quantities of crop residues such as rice husks, sugarcane bagasse and coconut by-products, all of which could potentially be used as bioenergy feedstocks.
The Philippines already has legislation supporting renewable energy, including the Biofuels Act and Renewable Energy Act. These policies encourage the blending of biofuels with conventional fuels and provide incentives for renewable energy investments.
However, bioenergy development has progressed slowly. The report points to several challenges, including limited feedstock supply chains, high production costs and uncertainty in policy implementation.
Improving infrastructure, strengthening coordination with farmers and investing in research and development could help unlock the country’s bioenergy potential while supporting rural development.
SHARED CHALLENGES
Although each country faces unique circumstances, the report identifies several common barriers to bioenergy development across Southeast Asia.
One of the biggest challenges is cost. Bioenergy fuels are often more expensive than conventional fossil fuels, particularly without government subsidies or incentives.
Another issue is the complexity of supply chains. Unlike fossil fuels, biomass must be collected from farms and plantations, transported to processing facilities and converted into usable fuels. Each step requires infrastructure, coordination and investment.
Technology is another hurdle. Advanced biofuels, such as those made from agricultural waste rather than food crops, are still developing and can be expensive to produce.
Environmental concerns also play a role. In countries with large palm oil industries, critics have raised concerns about deforestation and biodiversity loss linked to plantation expansion. Ensuring that bioenergy production remains sustainable will be essential to gaining international support.
BUILDING THE BIOENERGY FUTURE
Despite these challenges, the report argues that bioenergy could play a crucial role in Southeast Asia’s energy transition.
The researchers recommend stronger government incentives, greater investment in research and development and improved infrastructure to support biomass collection and processing.
Carbon pricing mechanisms, such as emissions trading or carbon taxes, could also help make bioenergy more competitive by placing a cost on fossil fuel emissions.
Regional cooperation will be another important factor. Under initiatives such as the Asia Zero Emission Community (AZEC), countries can share technology, investment and policy experience to accelerate the development of clean energy systems.
If these efforts succeed, the region’s agricultural waste could become a powerful energy resource.
What was once seen as discarded crop residue might soon help fuel vehicles, power factories and even propel aircraft.
For Southeast Asia, the path to a cleaner energy future may begin not in oil fields or coalmines, but in the very fields where its crops are grown. – Features Desk